Research › Search › Judgment

Punjab High Court · body

2001 DIGILAW 1394 (PNJ)

Shammi Jain v. Union of India

2001-12-12

ASHUTOSH MOHUNTA, JAWAHAR LAL GUPTA

body2001
JUDGMENT Jawahar Lal Gupta, J. (Oral) - The petitioners complain that a duly executed contract for supply of material was cancelled in total violation of the principles of natural justice. Later on the contract was awarded to respondent Nos. 5 to 8. 2. On 20th March, 2001, Shri P.K. Gupta, learned counsel for the respondent Nos. 1 to 4, had stated that to settle the controversy the competent authority can invite fresh tenders. The petitioners as well as others can compete. 3. Shri Ashish Aggarwal, learned counsel for the respondent Nos. 5 to 8, accepts this offer despite the fact that the authority has awarded the contract to them. However, Shri S.P. Jain, learned counsel for the petitioners, does not accept it. 4. Shri S.P. Jain, learned counsel for the petitioners, contends that after the execution of the contract the respondent authorities could not have passed an order of cancellation without following the principles of natural justice. He places reliance on the decision of their Lordships of the Supreme Court in The D.F.O. South Kheri and others v. Ram Sanehi Singh, A.I.R. 1973 S.C. 205. On the other hand, Shri Ashish Aggarwal submits that in view of the later pronouncements in State of Gujarat and others v. Meghji Pethraj Shah Charitable Trust and others, 1994(3) SCC 552 and State of U.P. and others v. Bridge and Roof Company (India) Limited, 1996(6) SCC 22 the principles of natural justice are excluded in matters arising out of contract. He has also referred to the decision in State of Bihar and others v. Jain Plastics and Chemicals Limited, J.T. 2001(9) SC 582. 5. It is undoubtedly true that the Department of Telecommunications had invited tenders vide its notice dated 20th December, 1999. It is also true that negotiations were conducted with the petitioners on 30th December, 1999. These had culminated in an agreement dated 7th January, 2000. A copy of this agreement is at Annexure P.7 with the writ petition. It is, however, not disputed that even respondent No. 7 had submitted tenders in respect of item Nos. 1 and 2. These were not opened or considered on the ground that total security in respect of all the items had not been deposited. Thus, it is clear that the petitioners offer was accepted without considering the tenders submitted by respondent No. 7. 1 and 2. These were not opened or considered on the ground that total security in respect of all the items had not been deposited. Thus, it is clear that the petitioners offer was accepted without considering the tenders submitted by respondent No. 7. Still further, it is also the claim of the respondents that tender forms had not been supplied to various parties. Specific mention has been made by respondent Nos. 5, 6 and 8 in this behalf. It was in view of this factual position that the authority had decided to terminate the contract. 6. Shri Jain submits that the principles of natural justice should have been followed. There seems to be diversion of opinion on the question of applicability of principles of natural justice in matters of contract. Be that as it may, so far as the present case is concerned, it appears that the stand taken on behalf of the department is absolutely just and fair. An offer has been made for inviting fresh tenders. It would afford equal opportunity to all to make an offer. Even the petitioners shall be entitled to do so. By this process further delay shall be avoided. Even if the contention of the Counsel for the petitioners for issue of notice is to be accepted, the hearing etc. would only result in delaying the execution of the work. By inviting fresh tenders the delay shall be avoided and neither the petitioners nor the respondents shall have any cause to complain. 7. Shri Jain submits that the petitioners have already made an investment of Rs. 10 lacs approximately. The respondents dispute this. Still further, Shri Ashish Aggarwal submits that even respondent No. 7 has prepared the material after the contract had been awarded to him. These are matters on which parties are at variance. We have nothing on record on the basis of which it may be possible to record a firm finding of fact. If the petitioners feel that they have suffered any damage, they may seek their remedy before the civil Court for recovery against the department. So far as the present case is concerned, we find that the action of the respondents in offering to invite fresh tenders so that all have an equal opportunity is just and fair. 8. Shri Jain submits that the impugned order assigns no reason. So far as the present case is concerned, we find that the action of the respondents in offering to invite fresh tenders so that all have an equal opportunity is just and fair. 8. Shri Jain submits that the impugned order assigns no reason. On behalf of the respondents it has been pointed out that under the agreement executed by the petitioners with the respondents, it was open to the department to cancel the contract by giving 30 days notice. It was not necessary to assign any reason. 9. Admittedly the dispute relates to the violation of the terms of the contract. If the petitioners want to claim damages, they may seek their remedy before the civil Court. So far as this petition is concerned, we dispose it of with the direction that the respondents may invite fresh tenders and award the contract in accordance with law. While considering the new tenders the amount, if any, deposited by the parties shall be taken into consideration. In the circumstances, there will be no order as to costs. Orders accordingly.